The EPA declined to comment on what it described as "pending litigation." But Hollyfrontier CEO George Damiris criticized the litigation, saying EPA had "correctly followed the law."

"Congress created the hardship waiver to protect these small refineries from the economic harm imposed by," the ethanol mandate, he said.

The ethanol groups allege that both CVR and Hollyfrontier failed to meet the "disproportionate economic hardship" standard contained within the law, arguing that CVR posted an $18 million profit in the biofuels credit market over the first three months of 2018 and Hollyfrontier just spent $1 billion buying back shares to raise its stock price.

The refinery waivers being challenged are those issued to CVR's facility in Wynnewood, Okla. and Hollyfrontier's operations in Cheyenne, Wyo. and Woods Cross, Utah. The lawsuit was filed in the 10th Circuit U.S. Court of Appeals in Denver.